The most significant event in the NHS last week passed almost unnoticed – the resignation from the NHS Commissioning Board of Jim Easton to become managing director of the private provider Care UK.

To him had fallen the task of touring the country telling localities of the need to find £20bn of savings by working more smartly, including greater outsourcing. Now his insider knowledge and experience will be put at the disposal of one of the biggest private providers in the country with interests spanning primary care, secondary care, residential care, community care and specialist care.

Easton is not the first and he will not be the last. Previous senior officials in the Department of Health transferring their wallets to the private sector include Matthew Swindells, chief information officer at the DH who joined KPMG, along with Mark Britnell and Gary Belfield, who had run the DH commissioning programme; Simon Stevens, Tony Blair's senior health advisor from 1997-2004 became a vice-president for United Health; and Penny Dash, formerly DH director of strategy, left for McKinsey.

It is not just former officials who are transferring their knowledge and experience to the private sector. Tom Sackville, a former Conservative minister left to run the International Federation of Health Plans, representing a hundred private health insurers in 31 countries, while former secretary of state for health, Virginia Bottomley became a director of BUPA.

Does all of this matter? Yes it does. As early as 2006 the top ranks of the Department of Health were almost completely free of generalist civil servants. Instead, they were filled with people recruited from outside, who saw their task as policy implementation, rather than helping to formulate policy.

The "revolving door" between DH, the major management consultancies and private companies had begun to turn furiously.

All of this has gathered fresh momentum as a result of the coalition government's determination to increase diversity of providers in all public services. This increases the potential for movement of employees between the public and private sectors, blurs the boundaries between sectors and creates potential conflicts of interest.

On the same day the Easton move was announced, it was also revealed that Alan Cave, a director in DWP with responsibility for overseeing the Work Programme, was quitting to join Serco, one of the main contractors on the same programme.

The Public Administration Select Committee investigated the issue of "business appointment rules" earlier this year. These rules govern the take-up of employment by former ministers and crown servants, with non-binding advice given by the Advisory Committee on Business Appointments (ACoBA).

The all-party committee was damning of ACoBA, concluding that it does not command public confidence and should be abolished. In its place the committee proposed a model based on the Canadian system, with an independent commissioner having the power to initiate investigations and to enforce statutory penalties.

This would certainly be an improvement, but as the report Cabs for Hire? by Transparency International points out, even stronger models can be found elsewhere. In France, for example, "having left civil service or public office to assume a private sector position in an industry over which they had previously exercised influence as a public servant" within a period of three years is a crime punishable by two years imprisonment and a fine of up to €30,000.

The Select Committee is not so drastic in its recommendations, but does propose prohibitions on public servants disclosing insider information for a period of two years for former ministers, special advisers and senior civil servants.

This is not a matter of hounding a handful of individuals, even though there seems to be good reason to question the ethics of their behaviour. The problem here is systemic – a system in which the boundaries between traditional "public service" and private interest have become so blurred that it is no longer possible to know if the public interest is being served.